The accelerated change in content consumption habits is driving the sector to systems more oriented to "digitize" processes and industrialize practices at all levels.
Juan Pablo Morales*
The effect of the tendency to cut the cable, which in the United States charged in 2019 more than 6 million subscribers, taking, according to Variety, in 10 years the penetration of pay TV from 87.8% in 2009 to 65.3% as of December last year, and that now seems to worry operators in a significant way, it will be mainly the search for digital subscription alternatives with on-demand entertainment systems of all kinds, which can now compete or complement Disney+ and Netflix as undeniable market leaders.
On the other hand, Pay-TV operators will surely seek the optimization of the operation, through the cutting of channels, with more effective package offers, making those signals that are not seen enough, do not represent a cost.
Latin American countries with the most developed and competitive audiovisual industries will surely have the lead in this race. The large networks, operators and OTT's have been, and will continue to strengthen their local operations, as is the case of HBO and Discovery, as well as Netfilx that, for its part, recently announced a millionaire investment to install a subsidiary in Argentina.
The challenge for many in this region will be to overcome years of competitive difference and to position themselves and show themselves to the world as true creative and production hubs. The clock is ticking and the orange industry is getting crops in places where the land is fertile but where little has been sown comparatively.
The emergence of specialized video-on-demand systems will continue to be a constant. During the last year I have been working very closely to position in the region one of the OTT platforms that has inspired me the most, for its social orientation and its educational purpose. This is the case of EDYE. TV, HITN's premium preschool content platform, which began to be offered in Latin America through television operators and currently has more than 1,500 episodes of the most important educational series for children of all time, such as the new versions of The Mayan Bee, Heidy and content by Jim Henson and Sesame Street, among others.
HITN a few years ago discovered that parents of preschoolers are an underserved niche. The offer of content for this age, was usually immersed in ecosystems with all kinds of programming, making parents feel a huge insecurity and without the possibility of getting more involved, to accompany the educational experience of the children. Under this challenge they designed, together with experts in programming, education and marketing, a wonderful business model focused on offering experiences with content for children within a solution designed for parents.
Other examples of OTT's with business models structured on the idea of serving niche markets can be Curiosity Stream, Gaia and DocuBay. These three services base their offer on documentaries and non-fiction series aimed at consumers with preferences towards science, technology, spirituality content in genres based more on scientific research than pure entertainment.
In the media we continuously find messages announcing the appearance of new content services in video on demand. I have been struck, for example, by new offers such as Quibi, which will seek to reach millennials with short content of up to 10 minutes, seeking to adapt its offer to the consumption habits that internet speed has generated in some niches of the population. Quibi would have, according to Cnet, content made with the participation of such important industry figures as Steven Spielberg, Guillermo del Toro and Justin Timberlake, among others.
With this gradual reorganization of the global content production ecosystem and the constant emergence of niche solutions, interesting opportunities open up for local production and service industries.
The search for local content (and universal language) by the big players in the market will continue to be a constant, so the challenge for Latin American countries is to continuously strengthen their industries, expanding the offer and diversifying, making them visible to the eyes of executives who are looking for ideas and innovation.
The creators of local and regional content and channels have great market opportunities, which help them reach their lost audiences and new users again, through the design of OTT systems, which day by day become easier to implement and, with a lot of work, to monetize.
Wonderful regional examples like the Retina Latina initiative are inspiring for creators, channels and institutions. Will we one day have an OTT that can, for example, add all the content of the public channels, both ondemand and with the simulstream of all of them?
And you, don't have your OTT yet?
Branded content
Within this equation, there is a whole world that is apparently beginning to be left out and that also represents one of the great opportunities for the audiovisual industry: advertisers.
The advertising of brands, who undeniably financed the career of media and especially television during the last 70 years, continues to turn to digital platforms to which audiences have gradually migrated.
The content revolution has not been alien to the advertising revolution, and the challenge here is to understand the ecosystem and find communication and marketing models that are inspired by it.
The complexity of advertising is now based on the fact that its objective is still to sell, in a world where the consumer is less and less loyal to brands and where consumers are also looking for more user experiences, so the challenge in content design is increasing.
It is interesting to keep track of SocialBlade's ranking of YouTube channels, which in the case of Colombia is in http://bit.ly/rankingcol, which tracks the status of the local influence of publishers in each region and where you can understand who the users are, their tastes, interests and their place of permanence. That's where they can be found.
Brands must begin to speak more effectively the language of users, with users and in the territory of users, and for this the creation of content and participation in platforms that engage them will be increasingly important and decisive.
It is not about paying advertising to Facebook and Google to get the contents to the users. It is about finding creative and organic ways that through these platforms bring the messages of brands, their values and interests, and of course, their products, to users.
While in 2013, according to the BCMA (Branded Content Marketing Association), 50% of brands did not know the concept of Branded Content, by last year 90% of them are already doing activities of this type and the growth of investment in 2019 in branded content was 41%.
Branded content is making its way and will continue to gain ground in the world of advertising and communication. Creative agencies, producers and media based on digital ecosystems are and will increasingly be the center where change and new models of the advertising market are generated. Here is one of the great opportunities for the audiovisual sector.
Experiment with experience production technologies such as augmented reality, and 360 video, disruptive content that increasingly connect better with the audience and make the consumer aware, products and services that are able to speak their own language in their own ecosystem.
*Juan Pablo Morales Sarmiento is CEO and Co-founder of Nuevos Medios Entertainment. You can contact him through his Twitter account @JuanPMoralesS
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